U.S. stocks rose on Monday as Wall Street bet tax cuts would keep the economic expansion going.
The Dow Jones industrial average rose 72.09 points to close at 23,430.33, with IBM and Verizon among the best-performing stocks in the index.
The S&P 500 gained 0.1 percent to finish at 2,582.14, with telecommunications as the best-performing sector. Delphi Automotive and General Motors shares were among the best-performing stocks in the index, rising 3.4 percent and 2.3 percent, respectively.
The Nasdaq composite rose 0.1 percent to 6,790.71, just below its record closing high.
Equities also got a boost from strong economic data, as leading indicators rose 1.2 percent in October.
Expectations of tax reform have been a positive for stocks this year, as a tax-code overhaul would potentially lower corporate taxes. The S&P 500 is up more than 15 percent in 2017.
“Odds are, it will succeed. Large corporations won’t benefit much because they’ve been gaming the tax code to lower their effective tax rate for many years. Smaller corporations, however, should benefit significantly,” said Ed Yardeni, president and chief investment strategist at Yardeni Research.
But stocks fell under some pressure last week as uncertainty around tax reform passing by year-end increased. Last week, the S&P 500 and the Dow recorded their first consecutive weekly losses since August.
John Stoltzfus, chief investment strategist at Oppenheimer Asset Management, said in a note that the stock market’s recent struggles are mostly linked to seasonal factors, including profit-taking, portfolio rotation and rebalancing.
“While some skeptics and bears seem intent on tying the equity markets’ weakness since the start of November to political uncertainty in Washington, we see the current malaise in these markets as routine,” Stoltzfus said.
This will be a short week for Wall Street as the U.S. stock market will be closed Thursday in observance of the Thanksgiving holiday. Trading volumes usually drop during shortened trading weeks, opening up the door for more volatile moves.
“This allows the algorithms to have more of an impact on market moves if headlines — geopolitical or tax reform-related, for example — grab the market’s attention,” said Quincy Krosby, chief market strategist at Prudential Financial.
IBM shares rose 1 percent after Barron’s said IBM could gain more than 30 percent over the next 12 months. Verizon shares, meanwhile, rose 1.7 percent after analysts at Wells Fargo upgraded the stock to outperform from market perform.
Delphi’s stock advanced after analysts at Bank of America Merrill Lynch upgraded it to buy from neutral. GM shares also got a boost after its stock was upgraded to buy from neutral.